Can Plaxo take on LinkedIn and Facebook?

In August 2007, Plaxo, a Silicon Valley company that made its name with an online address book technology, decided to add some features to its service and launch a full-blown social network.

At the time, even Peter Curley, a Plaxo product manager, approached the move sardonically. He titled his blog post introducing the service (known as Plaxo Pulse) with, “Oh geez, not ANOTHER social network.”

Now, more than a year later, has Plaxo made a spot for itself in the crowded and competitive social networking field?

Plaxo users still admire the service’s address book technology and its ability to thoroughly manage their contacts across different e-mail systems. But on the whole, users interviewed for this article say they’re lukewarm or cold to the addition of Pulse, the social networking tool.

Still, because of Plaxo’s addition of Pulse and its garnering of a largely professional user base, it is viewed as a modest competitor to other social networks in the valley, particularly LinkedIn, the most well-known business-minded social network that recently took a round of $53 million in funding, valuing that company at $1 billion.

Plaxo, for its part, was acquired by Comcast in May for a rumored $175 million (the actual price went undisclosed), signaling that a major media player sees a bright future for the service.

Even given this injection of capital, however, analysts say it remains unclear if Plaxo can lure users away from LinkedIn’s massive user base of 29 million members.

“LinkedIn blew Plaxo away in terms of the number of business users,” says Aaron Mentzer, a public relations manager at AtTask (a software company) and who uses both Plaxo and LinkedIn.

“Most services go through your e-mail contacts and let you know which of your e-mail contacts already use the service. [For me] LinkedIn generated probably 40 to 50 matches; Plaxo probably generated four to five, all within my company.”

Analysts and users also say Plaxo may have gotten in over its head with Pulse. The service allows users to share pictures, status messages or bookmarks with one another, dipping Plaxo’s toes in an even more dauntingly broad part of the social networking market dominated by Facebook and MySpace – taking on a challenge that some analysts say is all but insurmountable.

“They can’t compete with Facebook on the consumer side, and they’re a distant second to LinkedIn on the professional,” says analyst Jonathan Yarmis, a VP with AMR Research.

So who does want to use Plaxo, and why? Despite the competitive challenges, social media experts say that Plaxo’s address book, and its ability to synch with Microsoft Outlook as well as consumer-based e-mail address books from Gmail or Yahoo, makes it a valuable service.

The company also has a reputation of pushing for open standards between social networks so that users could own their data and transport it more freely between social networks.

“This isn’t about abandoning Plaxo or abandoning LinkedIn,” says John McCrea, Plaxo’s VP of marketing. “I belong to both services. We want to put the user in control. You should be able to build your address book with us and transport the data to other services, and back and forth.”

What the Hybrid Social Network Has to Offer

“Some of the early versions of social networks seemed frivolous to us,” McCrea says. “It wasn’t about real identity; it was about establishing a friendship with strangers with similar relationships. We started before either of those companies [LinkedIn and Facebook]. We’ve focused on being a service that’s useful for you being connected to the people who are important in your life.”

It’s easiest to explain Plaxo by describing its two main services. The first, its address book, is the company’s bread and butter and its competitive product to LinkedIn.

After you sign up, with your permission, Plaxo will cull your e-mail and IM accounts to build you a personal address book (and, no, it won’t spam your contacts in those services asking them to join Plaxo unless you explicitly ask to do so).

Plaxo allows you to designate whether a contact is “friend,” family” or “business” and has an extensive choice of informational fields for work, personal and professional contact information.

Plaxo’s address book service is well-regarded by users and analysts for synching with various email services, such as Microsoft Outlook, Gmail and Yahoo.

The second service, Plaxo Pulse, works like the newsfeed on Facebook. It provides a stream of news regarding what content you are consuming or contributing to, whether reading an article on, the social bookmarking service, or posting a picture to Picasa or Flickr, to name a few activities it tracks.

Plaxo Pulse allows users to share pictures, status messages and bookmarks, among other activities.

Because Plaxo’s overall user base trends professional, Plaxo can give people the address book technology necessary for their jobs plus a news feed in Pulse that has a more controlled look and feel than Facebook’s, which some people regard as too cluttered, McCrea says.

“Our demographic skews closed to the Linkedin demographic,” McCrea says. “The fun, flirtatious free-for- all of Facebook is fun and great for young people, but for those of us in our 30’s, 40’s and 50’s who think more carefully about what we share, we wanted to design it carefully.”

Are Users Buying In?

Plaxo users have mixed feelings about the service since the addition of Pulse. So far, they remain loyal to the address book functionality and its ability to synch with their e-mails (from Gmail to Outlook), but many are at best lukewarm on the social aspects of the service.

None of the Plaxo users interviewed for this article have used it as replacement for LinkedIn.

For example, Francine Hardaway, who heads Stealthmode Partners, a consultancy that helps companies with their growth strategies, initially joined Plaxo for its address book capabilities.

She says she hasn’t thought much of Plaxo Pulse, but has noticed that it caused her e-mail box to be flooded with people looking to add her as a connection on the social network.

“I liked [Plaxo] when it updated my address book and then shut up,” Hardaway says. “I don’t need it as a social network, and it’s much more obtrusive than LinkedIn, which does not force itself on the user. But Plaxo is a business network like LinkedIn, both of which are full of network junkies who sell insurance and are trying to take the advice of their bosses that ‘it’s a numbers game.'”

Kathleen Wiersch, a senior marketing manager at Baynote (a search company) who also uses Plaxo, complains of being spammed by other users – a criticism that has been leveled at the service in the past.

“I do use Plaxo but less than LinkedIn,” Wiersch says. “But since there are people who are on it who aren’t on LinkedIn, I still use it. I also think I am getting more ‘spam’ requests to connect through Plaxo including random business requests.”

LinkedIn shares this problem, but has instituted safeguards. LinkedIn has the dreaded “I don’t know” button, which, if hit five times, can ruin someone’s standing on the service by eliminating their account. On Plaxo, while you can “report a user” for bad behavior such as smam, the option is displayed less prominently.

Is LinkedIn Worried?
According to Jeremiah Owyang, a Forrester Research analyst, Plaxo has plenty of competition that isn’t going anywhere.

“Websites that aggregate contact information such as LinkedIn for business contacts are clearly a competitor, but we shouldn’t overlook Facebook which has the ability to capture both personal and worklives,” he says.

Whether Plaxo is on LinkedIn’s radar is another matter entirely. LinkedIn seems to want to associate this rival with Facebook more than itself in the public’s mind.

Asked if LinkedIn views Plaxo as a competitor, Krista Canfield, LinkedIn’s PR manager, responded via e-mail, “We’re not really aware of Plaxo. It’s my understanding (but you’d have to double-check with Plaxo on this) that they are more socially geared (with fan pages geared toward TV shows, etc.) while LinkedIn is strictly geared toward the professional.”


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Jim Love, Chief Content Officer, IT World Canada

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